Golding's Tainted Money

San Diego  Mayor Susan Golding's race for the United States Senate seat held by Barbara Boxer is over, but its ghost seems likely to haunt city hall for some time to come. Raising questions are the methods used by Golding to collect campaign money from key players in the controversial stadium expansion and Chargers-seat guarantee, as well as the local hotel industry, which is seeking dramatic increases in subsidies.

According to inside sources, Golding fundraisers decided early in the campaign to target Chargers owner Alex Spanos and his associates to form the backbone of the Golding fundraising machine. "Susan wasn't known outside of San Diego, even after the Republican convention. It was hard to get anybody to give money. They hoped and expected that Spanos would pave the way for the big money to come in."

Thus, say those familiar with the Golding fundraising effort, early in 1995, after her trip with Spanos back from the Miami Super Bowl on the Chargers' jet, the mayor spent long hours with Alex Spanos and his son Dean working on ways to come up with enough campaign seed money. Golding also agreed to support the stadium expansion and ticket-guarantee plan that Spanos laid before her in January 1995. In May 1995, the scheme sailed through the city council with little media coverage of its details by a supportive Union-Tribune.

A year later, in the spring of 1996, Golding also accompanied Spanos and his associates as he raised millions for the GOP convention in Washington, D.C., and New York. "The idea was that Golding was to get on Spanos's coattails and meet his monied friends who would give to Susan later," says an inside source. After the convention, the Spanos operation continued to solicit money for Golding.

But a hitch developed. Opposition to the stadium deal crystallized in a November 1996 referendum campaign to force a public vote on the Charger-ticket guarantee. After the referendum qualified for the ballot in January 1997, the city council agreed to hire the downtown law firm of Luce, Forward, Hamilton & Scripps in an attempt to keep voters from having their say.

Luce, Forward is closely connected to Alex Spanos, having repeatedly represented his football team in legal wrangles with disgruntled players. The same firm was hired a year earlier by the city council to defeat an effort by taxpayer activist Richard Rider to force the stadium deal onto the ballot. Though the firm also worked for Spanos, representing a legal conflict of interest, the city council, meeting secretly, agreed to waive the conflict and ultimately agreed to pay the firm at least a million tax dollars for its work to keep the stadium and convention-center issues off the ballot.

The law firm succeeded in its mission, convincing superior court judge Anthony Josephs to quash the taxpayers' suit against the stadium deal, but opposition to the ticket guarantee was mounting. By the middle of 1997, when Golding was required to file her first public accounting of her campaign fundraising, the Spanos connection with Golding was seen in the political world as unsavory.

The Spanos forces held back their contributions during the first half of 1997, and Golding was forced to report having received just $341,651, putting her well behind Democratic incumbent Barbara Boxer, who reported about $2 million in the bank, and Vista car-alarm magnate and Republican Darrel Issa, who by then had sunk $2 million of his own money into the campaign.

In the first half of 1998, Golding reported having received just $341,651, putting her well behind Democratic incumbent Barbara Boxer, who reported about $2 million in the bank, and Vista car alarm magnate and Republican Darrel Issa, who by then had already sunk $2 million of his own money into the campaign.

Although it wasn't obvious at the time, Golding's midyear funding report was the beginning of the end. Campaign veterans of both parties concluded that Golding's upfront fundraising weakness would discourage future donors from giving to her campaign. Contributions to Golding began drying up, with one exception: San Diego special-interest money.

After the midyear disclosure deadline, money from the Spanos clan and their related entities, including Luce, Forward, began to pour into Golding's campaign coffers. Disclosure reports later reveal that in the second half of 1997, direct Spanos contributions totaled $10,000. Luce, Forward employees gave a total of $6000.

Charles Bird, a partner in Luce, Forward who played a key role in arguing both the city's stadium and the convention-center cases in court, denies there was any sort of a quid pro quo between the campaign contributions to Golding and the firm's representation of city hall. "Absolutely not," Bird says, explaining that he thinks most of the Golding contributions from firm members were dated on the same day, December 12, because of a fundraising breakfast held that morning by an unnamed member of the firm. "The law firm makes no political contributions whatsoever," says Bird. "I believe that a partner who has long been a supporter of Susan Golding hosted a breakfast that day and invited other partners of the firm. I wasn't there to attend."

Employees of the multinational Caterpillar Company and Solar, its San Diego-based subsidiary, which has sought to redevelop its downtown property leased from the Port of San Diego, lined up to give the mayor a total of $7000. Employees of Southwest Marine, a shipbuilding outfit with a tidelands lease, gave Golding a total of $10,000.

Sources point out that Southwest Marine was owned by members of the Art Engel family, who also own San Diego Harbor Excursions, a lucrative concession that would benefit from the convention-center expansion, which Golding attempted to ram through city hall over the objections of those seeking a public vote.

Art Engel was a leader of the group that offered taxpayer activist Richard Rider a settlement fee in October 1997 for not proceeding with his opposition to the convention center. "As the Convention Center expands," Engel told the San Diego Business Journal that same month, "we will be suited to be the predominant player in the waterfront tourism industry in San Diego."